Last Gasp for MySpace?

These days, any discussion of social media usually refers to the “big three” – Facebook, Twitter, and YouTube. MySpace, the social network that started it all, is conspicuously absent from the list.

The decline of MySpace resembles the first-to-market stumbles of such giants as AOL and Yahoo! Just being first isn’t good enough when technology advances at rates beyond the speed of light.

But apparently, MySpace isn’t ready to throw in the towel. In what is being widely regarded as a re-launch, MySpace announced this week that a new version of the site is in the works and will be implemented in stages over the next several months.

The direction MySpace is taking seems a little like back to the future: the network will re-trench and focus on its core strength of entertainment – music, videos, and celebrities. As MySpace co-president Jason Hirschhorn said, “It goes back to discovery and self-expression. That’s where we came from and where MySpace really made its mark…”

A work in progress, MySpace has already dumped such random things as classifieds, horoscopes, job boards, and weather. Instead, the network will employ information from its users to “recommend movie trailers, recently released songs and video games.”

Ironically, MySpace does lead in at least one area: the company recently announced that MySpace Mobile is the most popular social application for the Android smartphone. MySpace was also the first social network to be included in Microsoft’s new Outlook Social Connector, which adds social networking to the Outlook email application.

These victories notwithstanding, the larger question looms: Can MySpace regain any sort of leadership position in the social media world? Right now, all the statistics say no. MySpace claims to have over 100 million users worldwide, but Facebook has over 400 million active users. In February, about 111 million people in the U.S. visited Facebook, a 95 percent increase from a year ago, while MySpace had about 67 million visitors, a 5 percent decrease, according to ComScore. eMarketer projects over $450 million of ad spending with Facebook this year – a 26 percent increase – while MySpace will likely drop 23 percent to about $360 million. Even worse, the ad deal MySpace has with Google is scheduled to expire in August 2010.

If MySpace is to survive, the more likely scenario is that it becomes a niche player in the entertainment world rather than a major social networking site. But that online market is also crowded. Maybe this re-orientation would make it of interest to online marketers involved in the music and movie business, but still, MySpace risks becoming just another entertainment site.

Jon Miller, Chief Digital Officer for News Corp., the owner of MySpace, tells the Los Angeles Times, “We need to be a platform for self-expression that is clearly differentiated from the competition.” But you have to wonder – given the success of Facebook, the growth of Twitter, and the video creativity demonstrated on YouTube – is it even possible for MySpace to get noticed?